Tesla and GM want to deliver on the hype over self-driving and electric vehicles

Hey Mike, take a look at the suggested adds and questions in bold…my concern right now is that other than Tesla, there aren’t any specific examples of companies making promises in the past decade and missing them. Can we spell out more of that in the story to support our “decade of hype” thesis? I’m at 551-250-3180 if you want to discuss. -Anjali

DETROIT – In October 2016, Tesla CEO Elon Musk made a bold promise: One of the company’s vehicle’s would drive itself from Los Angeles to New York by the end of 2017. Works.

“I feel pretty good about this goal. We’ll be able to do a demonstration guide of full autonomy all the way from LA to New York. So basically from home in LA to Times Square in New York. And then have the car go and park itself by the end of next year,” Musk said on a conference call with reporters. I previously tried to find this and could only find it in one article so I used a paraphrased one from our initial reporting. I will see if I can find a transcript once I have access to FactSet.

The trip, which received international attention, was made in conjunction with Tesla announcing all of its vehicles were being equipped with “full self-driving hardware” that would “be substantially safer than a human driver.” The company had previously spent a year testing the new hardware.

But the trip never happened and now – more than three years later – Tesla’s vehicles with its Autopilot driver-assist system still require driver monitoring. The system has also been criticized for allowing for driver misuse and its role questioned in at least three fatal crashes. Works.

While Tesla has become known for making and, many times, missing such goals, they’re not the only ones. After a decade of hype, automakers and tech companies in the space will look to deliver on ambitious promises around both autonomous and electric vehicles in the 2020s.

The companies see both as multitrillion dollar business opportunities. They’ve also touted the technologies will create a safer, more environmental-friendly way of transportation. They’ve led Tesla, General Motors and others to announce plans for a future with significantly lower, even zero, auto accidents and vehicles with zero emissions.

Promises like Musk’s have driven stocks of such companies higher. 2-3 examples here of an announcement made and subsequent stock reaction.

But so far, the lofty promises haven’t been met. It’s one of the reasons industry experts expect all-electric vehicles to enter the mainstream before autonomous vehicles due to regulatory concerns, cost and other factors, but even in that category, progress has been slow-moving. Works

Companies in the next decade are looking to deliver on their goals to satisfy investors. A report by AlixPartners earlier this year estimated the industry’s spending on autonomous driving and electric vehicles will reach a cumulative $85 billion by 2025 and $225 billion by 2023, respectively. It’s cumulative, but spending was expected to be $40 million for autonomous from 2017-2019. The report did not include EVs for that time period, but I’m meeting with them tomorrow and I should be able to find out.

Creating and launching driverless vehicles has been easier said than done. There are major safety and regulatory barriers as well as unforeseen technological hurdles. Tesla, General Motors and Uber are among the companies to push back plans for autonomous vehicles despite investing billions in the technologies. What exactly did GM and Uber promise and how much did they push back their targets? Both below.

GM, after delaying a launch this year, is expected to deploy an autonomous ride-hailing fleet as early as next year in San Francisco. Uber, which several years ago promised to have tens of thousands of autonomous vehicles by now, will begin testing its third-generation self-driving vehicle in 2020; Ford Motor expects a commercial self-driving vehicle business by 2021; and Hyundai Motor with auto supplier Aptiv created a $4 billion joint venture aiming to launch autonomous vehicles in 2022.

“We overestimated the arrival of autonomous vehicles,” Ford CEO Jim Hackett said at a Detroit Economic Club event in April.

Tesla’s new goal for autonomous vehicles is 2020. Musk earlier this year said the automaker expects to have 1 million robotaxis on the roads next year. He also predicted within two years Tesla will be making cars with no steering wheels or pedals – something current safety regulations do not allow.

Volkswagen, Volvo and others have discussed plans for autonomous vehicles or services but have not given exact details on timing.

Lyft, which currently offers autonomous vehicles in Arizona through a partnership with Alphabet’s Waymo, has assigned around 400 of its engineers to work on two distinct self-driving initiatives, including a ride-hailing platform and the development of a “self-driving stack,” also known as the brains of the car, instead of an entire vehicle.

Waymo has been the most successful in launching autonomous vehicles. It has operated a limited ride-hailing fleet with the vehicles in metropolitan Phoenix since December 2018.

Much of the wind was taken out of the sails for a rapid proliferation of autonomous vehicles in 2018, when an Uber self-driving test vehicle was involved in a fatal accident involving a pedestrian.

“The Uber fatality was really the thing that kicked it off,” said Sam Abuelsamid, principal research analyst at Navigant and an engineer, referring to the slowing of the “accelerated hype curve” around autonomous vehicles.

The death of the pedestrian, Elaine Herzberg, was the first-known fatal accident involving an autonomous vehicle, three years after Uber debuted its first self-driving vehicle.”

As a result of the accident, Uber ceased testing for months and autonomous vehicles as a whole were put under heavy scrutiny that continues to have a ripple-effect on the industry.

“People are actually taking this problem more seriously,” said Abuelsamid, adding many of the main players have acknowledged how challenging autonomous vehicles can be and have sought multibillion partnerships to ensure they’re done right.

GM has been one of the most ambitious when it comes to launching autonomous vehicles, however it has always said its plans would be “gated by safety.”

“There’s every reason to launch this cautiously and carefully,” said Stephanie Brinley, principal automotive analyst at IHS Markit. “You’ve really got to be as safe as you possibly can. I think automakers should be able to pull it back a bit if they have to. There have been delays but there has been forward progress.”

By 2030, Abuelsamid expects autonomous vehicles to be used in cities for things such as delivery and transporting people, but remain far from dominating U.S. roadways.

“We’re going to continue to see progress toward a lot of these goals,” he said. “As it has been for a lot of these things like electrification, it’s probably going to be more small steps than huge leaps.”

Those small steps must include overhauling federal regulations. Current laws require vehicles have manual controls and other safety measures that make sense for vehicles with human drivers but aren’t necessarily applicable to driverless vehicles.

For example, side mirrors and airbags in steering wheels are required by federal law but are unnecessary parts when a vehicle can drive itself.

Nearly every major automaker in the past decade also has promised a fleet of all-electric or “electrified” vehicle offerings in the 2020s.

GM, Volkswagen and others have announced plans to sell 1 million all-electric vehicles or more globally a year during the 2020s. Others such as Toyota and Nissan have announced similar goals for “electrified vehicles,” which include plug-in hybrid models in addition to all-electric.

Both GM and Volkswagen previously missed sales targets regarding electric vehicles. In 2012, GM said it planned to have 500,000 electrified cars on the road by 2017 (it ended up with 243,133). In 2010, Volkswagen said it expected to sell 300,000 electrified vehicles annually by 2018 (its total last year was closer to 100,000).

The hype around all-electric vehicles was so high that J.D. Power and Associates predicted that within a decade, global hybrid and EV annual sales would top 5 million units.

The promises come as many analysts and forecast firms expect acceptance of all-electric to begin in the 2020s but remain far from mainstream. Lack of charging infrastructure, lower-than-expected gas prices and battery costs all contribute to the lackluster sales of all-electric vehicles.

“There’s a lot happening and I think we have realized some of those early projections were more moonshot targets,” Brinley said. “Of course, you set an ambitious goal because if you don’t set a goal, you won’t get there at all.”

IHS Automotive forecasts sales in the U.S. will represent 3% of sales in 2020, followed by 8% in 2025 and 11% in 2030. The auto research and intelligence firm expects 120 EV models to be offered in the U.S. by 2025.

Others such as LMC Automotive are slightly less optimistic about the growth of EVs in the 2020s. The company expects electric vehicle sales to steadily increase to only 5.1% of the U.S. market by 2025.

“It’s been promised. We’ve been talking about it forever. For EVs, we’re at a tipping point at least for availability,” said Jeff Schuster, president of global forecasting at LMC Automotive. “The last 10 years were probably filled with a bit of over promise and under deliver.”